Friday, May 24, 2024


Martha Stewart Trial: Second Day of Deliberations

Jurors at the trial of Westports Martha Stewart stock trial finished a second day of deliberations today after indicating they were focused on a charge of perjury against StewartҒs former stockbroker.

In a note to the judge before wrapping up for the day, the jurors asked about the standards of evidence required to convict on the count.

It accuses Peter Bacanovic of lying in sworn testimony to the U.S. Securities and Exchange Commission on Feb. 13, 2002, about Stewart’s sale of ImClone Systems stock.

U.S. District Judge Miriam Goldman Cedarbaum told jurors before deliberations that perjury requires special rules: Jurors must rely on testimony from two witnesses, or one witness whose testimony is supported by a document.

Deliberations were expected to resume Friday morning.

In a note today, the jurors asked the judge whether it was enough to have the testimony of one witness plus a document created by the same witness.

“I think the short answer is yes,” Cedarbaum said.

Specifically, jurors said they were wondering about a line in the perjury charge in which Bacanovic told the SEC he simply gave Stewart the price of ImClone in a message he left for her on the day she sold.

Stewart’s personal assistant, Ann Armstrong, testified that Bacanovic never left a message about the price but said ImClone was “going to start trading downward.”

Jurors asked the judge whether it was enough to have Armstrong’s testimony, plus the message log Armstrong kept, as the two pieces of evidence to satisfy the perjury charge.

The government said it was enough; Bacanovic’s lawyers said it was not. The judge appeared to agree with the government, but said she would allow written arguments to be submitted overnight.

Earlier today, the jurors, who were in their second day of deliberations, asked to review testimony on what Bacanovic told the SEC about the day Stewart sold her ImClone stock.

They indicated in a note to the judge that they were focusing on what Bacanovic told the SEC in two interviews on Jan. 7 and Feb. 13, 2002.

An SEC lawyer has testified that in the first interview, which was not taped, Bacanovic claimed he spoke to Stewart on Dec. 27, 2001, the day she sold her stock. Bacanovic’s assistant, Douglas Faneuil, actually handled the sale.

Bacanovic backed away from his claim in a follow-up interview Feb. 13, and his lawyers have questioned the accuracy of the SEC lawyer’s recollection about the initial interview.

Claiming he had spoken with Stewart is an element of the charge against Bacanovic of lying to investigators. He and Stewart are accused of repeatedly lying about the circumstances of her stock sale.

The defendants claim Stewart sold her 3,928 shares of ImClone because they had a pre-existing agreement to sell when the stock price fell to $60.

The government says that was a cover story and Stewart actually sold because Bacanovic ordered Faneuil to tell her that ImClone CEO Sam Waksal was trying to sell his shares.

A negative government report the next day about an ImClone cancer drug sent the stock tumbling.

Stewart’s lawyer now concedes she received the Waksal tip but maintains Stewart was accurate when she told investigators in April 2002 that she had no memory of it.

The jurors also asked today to see documents related to tax planning that Bacanovic did for the homemaking mogul in late 2001.

Bacanovic was selling some of Stewart’s stocks at a loss to offset capital-gains taxes for the year. Jurors asked to see a Dec. 24, 2001, e-mail in which Bacanovic told Stewart he had completed the sales.

The ImClone trade came three days later, and Faneuil testified that Bacanovic initially claimed Stewart had sold ImClone for tax loss purposes, when in fact the stock was sold at a gain.

One thought on “Martha Stewart Trial: Second Day of Deliberations

  1. Gordon,
    I would like to thank you for covering this matter throughout and creating the forum that brought this matter to the public attenetion. This is a matter of “fairness”, and I thank our First Selectperson, Diane Farrell for listening to the issues and responding in an appropruate manner.
    The work is now just beginning, and I would be willing to participate in any apprpriate manner to make sure the new assessment is closer to the mark.

Leave a Reply

Your email address will not be published. Required fields are marked *